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Real Property • Conveyances
PROP#194
Legal Definition
Under a race statute, whomever records first wins.
Typically, a race statute uses language like, "whose conveyance is first recorded."
Typically, a race statute uses language like, "whose conveyance is first recorded."
Plain English Explanation
Before we dive into this card, let's set some context. In a perfect world, when Amy conveys Whiteacre to Bob, Amy will immediately and permanently respect the fact that Whiteacre is now Bob's. In the real world, unfortunately, there are circumstances where Amy may convey Whiteacre to Bob and then later convey it again to Carl. Under common law, the courts dealt with this by giving Whiteacre to whoever was "first in time", meaning, Bob would prevail over Carl because Bob received his conveyance first from Amy.
As the world became more sophisticated, jurisdictions began passing Recording Acts, which were laws that attempted to solve these types of problems by requiring that people publicly record their conveyances. In other words, when Amy conveys Whiteacre to Bob, Bob has an obligation to publicly record the fact that he has received Whiteacre so that when Amy later tries to sell it to Carl, Carl has the ability to check to see if Amy has previously sold or conveyed it. Seems fair, right?
Unfortunately, there are three types of jurisdictions which handle these scenarios differently. You must learn each scenario so you can identify who ultimately has the superior claim to a piece of property that has been given to multiple parties.
In this card, we talk about race statute jurisdictions.
Under race jurisdictions, bona fide purchasers don't matter. The law doesn't care if someone was aware that property had already been previously conveyed or sold. All it cares about is who records first. Note that very few states have this type of recording act.
As the world became more sophisticated, jurisdictions began passing Recording Acts, which were laws that attempted to solve these types of problems by requiring that people publicly record their conveyances. In other words, when Amy conveys Whiteacre to Bob, Bob has an obligation to publicly record the fact that he has received Whiteacre so that when Amy later tries to sell it to Carl, Carl has the ability to check to see if Amy has previously sold or conveyed it. Seems fair, right?
Unfortunately, there are three types of jurisdictions which handle these scenarios differently. You must learn each scenario so you can identify who ultimately has the superior claim to a piece of property that has been given to multiple parties.
In this card, we talk about race statute jurisdictions.
Under race jurisdictions, bona fide purchasers don't matter. The law doesn't care if someone was aware that property had already been previously conveyed or sold. All it cares about is who records first. Note that very few states have this type of recording act.
Hypothetical
Hypo 1: Oz is having a BBQ and invites friends over. Amy and Bob attend. Oz conveys Blackacre to Amy. Everyone cheers and claps. Bob is shocked, because he wanted to buy the land. The next day, Bob tells Oz, "Man, I would have given you $100,000 for Blackacre." Oz says, "Well, you know that Amy hasn't recorded yet, so I'll happily sell it to you." Oz conveys Blackacre to Bob, who immediately records it. Result: In a race jurisdiction, it doesn't matter that Bob was already aware that Oz conveyed the land to Amy. All that matters is Bob is the first to record his deed, which means he prevails over Amy.
Visual Aids
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